2022 (11) TMI 803 - Tri - Insolvency & Bankruptcy
Seeking direction to respondent to accept the claim submitted by the appellant/ Applicant - whether a Leasehold Land forms a part of the Liquidation Estate as per the provisions of Section 36 (3) read with Section 36 (4) of the Code as the Corporate Debtor is not the owner of the land? - Section 42 of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- In the present case, it is noted that the leasehold land in question was allotted to Mehfil Restaurants and Hotel Limited in the year 1986 through an auction process and its name was subsequently changed to James Hotels Limited. Three different promoters bought this company by taking over the corporate debtor and changing the management. All this happened before the Liquidator came into the picture. The lease deed, through which the property was auctioned, contains express covenants regarding the transfer of property to a third party, thus signifying that the corporate debtor has the right to transfer the property to a third party and not merely the right to use the property.
In the present context, the Chandigarh Administration has not raised any objection despite being informed about the liquidation proceedings and there are provisions in the lease deed regarding transfer of the property to a third party subject to certain conditions. The title to the land continues to remain with the corporate debtor, i.e. James Hotels Limited even after the successful bidder takes over the Corporate debtor. Thus, the assertion of the applicant that the lease deed is a contractual agreement, and the leased land cannot form a part of the Liquidation Estate of the Corporate Debtor is in the teeth of the provisions of Section 36(4)(a)(iv) of the Code appears misconceived - the leasehold rights of the Corporate Debtor over the land in the present case are its “intangible assets” within the meaning of Section 36(3)(d) of the Code and the same can be a part of the assets for E-auction as a “Going Concern”, especially when even after the implementation of the bid the corporate debtor continues to exist as the same corporate entity i.e. James Hotel Limited with the existing shareholders replaced by the Successful Bidder, and the existing lease deed with the Chandigarh Administration continues in its name as such.
Application disposed off.